Over the past week, the United States, European Union, United Kingdom and several other countries imposed rounds of sweeping new sanctions on Russia in response to its invasion of Ukraine. Between February 21 and 23, 2022, the U.S., EU, U.K., Japan and Australia announced an initial round of sanctions after Russia officially recognized two Russian-backed separatist regions of eastern Ukraine—the so-called Donetsk and Luhansk People’s Republics (respectively, “
DNR” and “
LNR”), and then deployed troops to these regions. The first wave of sanctions targeted Russian sovereign debt, several Russian banks, and a number of Russian “elites” and officials, including Russian Defense Minister Sergei Shoigu. The measures additionally included a trade and investment embargo on the two separatist regions—similar to existing restrictions on Crimea. Germany also announced that it would halt certification of the Nord Stream 2 natural-gas pipeline. The U.S. followed with sanctions on Nord Stream 2 AG, its CEO, and its corporate officers on February 23, 2022.
A second wave of sanctions was deployed after Russian forces crossed further into Ukraine and launched air strikes. On February 24, 2022, the U.S., EU, U.K., Japan, Australia, New Zealand, Taiwan and Canada announced sanctions, which included targeting Russian financial institutions and individuals, extending restrictions on debt and equity, and announcing new controls on exports of high-tech goods into Russia.
On February 25, 2022, the U.S., U.K., EU and Canada further intensified the pressure by directly targeting Russian President Vladimir Putin and Foreign Minister Sergei Lavrov with asset freezes and, in the U.S., travel bans. Australia also announced that it would seek to directly sanction President Putin and Foreign Minister Lavrov on February 26, 2022.
On February 26, 2022, the European Commission, France, Germany, Italy, the U.K., Canada and the U.S. committed to undertake further restrictive measures within the coming days. The moves include removing key Russian banks from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”)—a secure financial messaging system—and imposing sanctions on the Russian Central Bank, designed to significantly restrict its access to its foreign currency reserves. Japan subsequently announced that it would join the measures to block Russia from SWIFT on February 27, 2022.
Russia is no stranger to sanctions. The U.S., EU and Japan each imposed sanctions on Russia in response to the Russian annexation of Crimea in 2014. The U.S. introduced further sanctions after U.S. intelligence agencies determined that Russia had interfered in the 2016 US presidential election, in response to a 2018 nerve-agent attack on Sergei Skripal and his daughter in the UK, after determining there was additional Russian interference in the 2020 US election and following reports of Russian bounties on U.S. soldiers in Afghanistan and a hack on Texas-based software company SolarWinds Corp. In 2021, the U.S. and EU also imposed targeted measures in response to the poisoning and jailing of Russian opposition leader Alexei Navalny.
In recent years, Russia has sought to buffer the Russian economy against Western sanctions as part of its “Fortress Russia” strategy. It remains to be seen whether this latest wave of concerted sanctions efforts by the U.S., EU, U.K., and their allies around the world will have the intended effect. However, they are by far the strongest and widest ranging package of sanctions that have been imposed on Russia.
Key Takeaways
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client publication. The landscape is changing rapidly, and reports indicate that additional sanctions could be forthcoming. We are tracking these developments closely and will provide further updates as the situation evolves.
